The SEC announced the delay last week after a meeting with a CBI delegation that argued European companies with dual listings in the US need extra time to comply with Section 404 of the SOX Act due to additional European and national requirements.

As well as SOX, European dual-listed companies are also facing the move to International Financial Reporting Standards, and the EU Financial Services Action Plan. In addition, UK companies also face the imminent introduction of the Companies Bill, which is designed to reform company law, and is due to take effect from next month.

The new extension means foreign private issuers, as well as US-based non-accelerated filers, will have an extra year to comply with the internal control over financial reporting. Those companies will now have until the first fiscal year ending on or after July 15, 2006 to comply with Section 404.

It is the second time the SEC has extended its compliance deadlines for SOX. A year ago the Commission gave accelerated filers (companies with a market cap of over $75m) a deadline of November 15, 2004 instead of the original June 15, 2004, while the deadline for non-accelerated filers was extended until July 15, 2005, from April 15, 2005.

The CBI lobbied hard for extra time for European companies to deal with the demands of Section 404 and we are pleased that the SEC has granted a meaningful extension, said Sir Digby Jones, CBI director general.

The extension was announced shortly after a CBI delegation including the chairmen of Cadbury Schweppes Plc and BA Plc had met with the commissioners to emphasize the resource problems facing dual-listed firms in attempting to meet US, European, and national regulations.

Announcing the extension, SEC chief accountant Donald Nicolaisen warned that affected companies should not rest on their laurels. I don’t underestimate the effort this will require for smaller companies and foreign private issuers,

but this extension will provide additional time for those issuers to take a good hard look at their internal controls, he said.